Sellers in panic mode. WSJ reports biggest home sale collapse since 2009.

Homebuyer demand across America just collapsed again, according to a new report from the Wall Street Journal, suggesting that the 2025 housing market is going to see even bigger price drops as the year goes on. You can see that the Wall Street Journal reported that home sales in March fell 5.9%, the biggest drop since 2022. And amazingly, folks, this was the slowest sales pace for any March since 2009, near the peak of the financial crisis. And so this is getting to be a major issue in the housing market, everyone. Just how low this buyer demand is in 2025. And it's starting to cause sellers across the U.S. housing market to really start to freak out a bit. In particular, Realtor.com is reporting that big homebuilders are doing massive price cuts in Florida. With the COO of KB Homes revealing to investors in late March, the company had to reduce prices by more than $30,000 in the Sunshine State to drum up local business. With Florida being their softest state in terms of sales demand in the first quarter. Now at this point, many of you know that Florida's housing market is in a correction. But what I think some of you don't know is the fact that this correction is now spreading to other housing markets across America. If we take a look at this map on ReVentureApp, we can see home values declined minus 0.43% in Florida in March, which annualizes to about a 5% drop over a full year. However, take a look now at Georgia. Georgia is now officially in minus territory in terms of home value growth, minus 0.3%. In addition, out west in states like Colorado, Arizona, California, Oregon, and Washington, we are also seeing values decline. And the one thing that seems abundantly apparent is that homebuyers are going to wait on the sidelines for these price drops to get bigger. Because homebuyers have become very fatigued by the housing market over the last couple years. I know you guys have been watching my channel. You've been watching Zillow listings for the last three years. And just because prices are starting to drop doesn't mean that you're all of a sudden going to power into the market. I want to show you this poll, everyone. I polled you guys on our ReVenture 2025 homebuyer survey. And one of the questions I asked you all is, what's the number one thing stopping you from buying a house right now? And I want you all to pay attention to these responses because these responses are going to tell you a lot about where the housing market's heading. A massive 72% of you said the number one thing stopping you from buying a house is because prices are too high. So the vast majority of you are not buying simply because prices are too high. Meanwhile, 11% of you said that you're not buying because mortgage rates are too high. While 9% of you said you're not buying because economic environment is too uncertain. And what is just so fascinating about these results to me is that they counter what you typically see in the mainstream news narrative on the housing market. The mainstream news narrative on the housing market continually says that the reason that buyer demand is low is because of high mortgage rates and economic uncertainty. Like the amount of articles I've seen over the last month that are blaming the slow spring housing market on tariffs is like unbelievable. It seems like everyone's now just blaming tariffs or 7% mortgage rates for low buyer demand, but that's wrong. The reason buyer demand is low is because prices are too high. And if you understand that fact about the housing market, you will then understand what needs to happen in the housing market over the next couple of years for the buyer demand to come back in. And very simply put, it's that prices need to drop and need to drop significantly. Prices are dropping everyone because I'm going to show you some listings right now where sellers are doing some big, big price cuts. And you guys can let me know if you think these price cuts are big enough to sell some of these homes. We're going to start by looking in Dallas and we're going to go north of Dallas into a suburb called Salina. We have a three bed, two bath house that just did a $25,000 price cut built in 2017. Now you can see their original list price was $625,000 back in August and they've since cut it to $640,000. So it's an $85,000 price cut. This house has been on the market for nine months, but it's still not selling. And here's the reason why it's not selling. The original owner bought it in 2022 around $515,000. And so this owner is still trying to make a profit, even though the market north of Dallas has corrected by almost 10% since then. And this is the ultimate issue on the housing market right now is something I call the bid ask spread. And we're going to get more into the bid ask spread later in this video because understanding this bid ask spread will help you make better decisions about when and where to buy a house. But first, let's look at more listings. We're going to go out now to San Diego. San Diego is a housing market and it has started to really, really slow. You can see on this townhome, a two bed, two bath townhome, it's on the market for $499,000. Now they just did a $50,000 price cut, $549,000 to $499,000. And you can see the Zillow value estimate for this townhome is back to where it was in early 2022, but still way above what this owner paid for it in 2017 at $260,000. But if you want to see the biggest price cuts right now, you got to go to Florida. For instance, this is a house in Venice, Florida, which is to the south of Tampa, close to Sarasota. They just did a $60,000 price cut on this three bed, two bath. Actually looks pretty nice on the inside. And the original listed at $449,000 last July. Now they're down to $360,000. So literally this house has been on the market for almost 10 months and they've cut it $90,000. And this is a good example of just what kind of has to happen to get sellers to really cut the price. The house just has to sit on the market sometimes for almost a year. And so these sellers are starting to wake up on the U.S. housing market, which is why you're seeing the month over month value growth go negative in so many different states. But you have to remember housing downturns and home price declines usually take place over a five to six year span. The last downturn from 2007 to 2012, that was a five year downturn in the U.S. housing market. So we're still in year one and a half maybe of this downturn. So there's still going to be more price declines coming. Now, I want to talk about that bid ask spread I mentioned a couple of minutes ago. This is really fundamentally why the buyer demand is so low on the housing market right now. If you're someone who wants to understand the dynamics of the housing cycle and when prices will drop by more and demand will increase in the future, understand this bid ask spread. And the essential problem is that home buyers can only really bid a certain amount on a house right now. With prices in a record bubble, with mortgage rates at 7% and income growth constrained, the average buyer can maybe only afford $350,000. And they just can't go above that. They're constrained by their budget. So the buyer's bid is capped. However, sellers are still asking a price that's well above the buyer's bid. That house that the buyer can afford for $300,000, the seller still might be asking $375,000. And it's that $75,000 bid ask spread in this hypothetical scenario that's leading to the collapse in sales and leading to the collapse in demand. There's just a massive disconnect between what buyers can afford and what sellers think their house is worth. And the longer that this downturn lasts, the longer that the demand stays low, the more that inventory goes up in the future, the more that that bid ask spread will close. However, the way it's going to need to close is for sellers to get more realistic on their expectations because there's no easy way for buyers to bid more on the housing market right now. And the way to understand this is to look at a very simple metric that I'm showing you on this graph, everyone, called the mortgage payment as a percentage of income. And this is data that goes all the way back to 1953 in America. So we have 72 years of data on housing affordability, how much Americans are having to pay to buy a house in terms of mortgage tax and insurance relative to their income. And you can see today that we're at 38% mortgage payment to income ratio, median income of $83,000, annual payment of $31,000. That means that it's very expensive, objectively and historically, to buy a house today. The long term median is 29%. And so that fact is very helpful to understand if you're a seller, right? If you're trying to sell a house and you think your house is worth some amount and you're talking to your realtor and your realtor is like, no, it's worth this amount. And you think it's worth more. Just understand that the affordability in today's market is literally the second worst it's ever been in the last 72 years. There's no historical precedent for this affordability sustaining itself. You can see the only other two times where things were this unaffordable was the 06 bubble before the big crash when homebuyers had to pay 38% of their income on mortgage payments. And then in 1981, when it went up to 56%, when this is when the Fed hiked interest rates to 18%, it was a very unique circumstance. Those were the only other two times in U.S. history where home buying was this expensive. And what happened after both of those times? It became much cheaper to buy pretty quickly after those peaks, suggesting that this situation of houses costing 38% of your income to buy and own, it's not going to last. Something will give in over the next couple of years, whether it be prices, whether it be mortgage rates and whether it be incomes going up or some combination thereof, I think is likely to happen. But really the big thing, prices need to drop. If prices drop, this affordability ratio will get way better. And once it goes towards this long-term median, then you start to know that you're in a housing market where it's more of a decent time to buy. And there's one thing that a lot of people still say in real estate that kind of bugs me. And you guys can let me know if you hear people say this, like on Instagram and YouTube. They'll say something along the lines of time in the market beats time out of the market. Or that home prices always go up in the long run, so you should just buy today. One of the people I see talking a lot about this is Dave Ramsey. He still has kind of this old school mentality that you should just always buy real estate and never sell real estate because it just always goes up. But what that mindset ignores is the presence of housing bubbles. Is that housing bubbles can form. And when these bubbles form, it makes it a very bad idea to buy real estate in the peak of that bubble. And it really exposes you to massive downside risk if you do. To understand how big this risk is, look at this graph everyone and stay with me here. I know I'm showing you guys some more intense and specific data. But I want you all to understand why the demand is so low right now and why it won't come back until prices drop. It is very clearly illustrated on this graph, which is looking at inflation adjusted home prices over the last 134 years. And what do you see? Is that from 1890 all the way to the late 1990s, home prices in America just tracked inflation. They didn't go up by more than the rate of inflation. They were tremendously consistent. For a good 100 years, home prices basically went up, let's call it like 2% a year, 3% a year. Maybe if inflation was high in a given year, home prices would go up 9%. In that context, it is correct to say housing does always go up. Time in the market beats time out of the market. However, there's a problem more recently in the last two decades, and that's the formation of bubbles. The first bubble started in the mid 2000s where the home price inflation index rose to 266, highest level of all time. We had never seen it. Prices went up faster than inflation, incomes and rents. Then they crashed. Then we reentered another bubble today, which is actually a bigger bubble than 06. Prices have gone up even more than inflation, even more than income and rents than they did in 06. And that's also important to understand. I see some people in the comments section try to say that inflation means you can't look at what real estate is worth in the same way you used to. And that the value of our dollar is less. And so maybe you should buy real estate as a result. But that's not true, everyone. Inflation adjusted home prices are at their highest level of all time. And so when you see this graph and how high prices are today compared to the long term average, that's telling you that we're not in a situation where time in the market beats time out of the market. We're in a situation where if you buy, you expose yourself to heavy downward risk and heavy downward price pressure. And this is the calculation that I think a lot of you already intuitively know all of this just by looking at how much homes cost on Zillow and then looking at your income and looking at your bank account. You say something doesn't make sense about buying in today's market. So this is something that the average homebuyer has figured out three years ago. But it's something that the real estate mainstream is only starting to figure out right now because their narrative was just so based off mortgage rates, so based off economic uncertainty, and so based off the Fed cutting rates. They all thought that as soon as the Fed cut rates, buyer demand would come back. But now that's clearly wrong. And the demand is getting even worse year over year. And so where does that leave us now? For the rest of 2025 in terms of what the housing market is going to do and how much home prices are going to go up or go down? Well, again, folks, it's regional. It's regional. So if we look at the monthly changes in prices in March, and this is data you can access on ReVenture app. If you sign up for a premium plan and look at our home value growth month over month under home prices and affordability, you can see this monthly data for most zip codes in America. You can see that values went down in about half of the U.S. In these states in blue is where values dropped. But values still went up in the states in red, in the Midwest, in the Northeast, in Kentucky. Values still went up. So we still have a bifurcated housing market where there's still a housing shortage here in the Northeast and Midwest. If we go to a metric on ReVenture app called inventory surplus or deficit, you can see there's an inventory deficit still, an inventory shortage in the Northeast and Midwest. It's getting a little better, but we still have a shortage of homes for sale here. Meanwhile, we have a glut of homes for sale in the South and Mountain West, which is why values are going down in these markets. And in terms of how much prices could drop fundamentally, there's really one metric I'm looking at right now, and that's the overvaluation rate in a certain city or zip code or neighborhood. How overvalued prices are compared to the long run average. This is a metric we have on ReVenture app that helps you better understand if you're getting a good deal if you buy in today's market. And by a statewide level, you could see a lot of markets. Most markets are overvalued. Only two states are undervalued, Louisiana and North Dakota. Those are the only two states where home prices are actually cheaper than their long run norms relative to income. Everywhere else, prices are overvalued and sometimes very overvalued. In Tennessee, values are 26% overvalued. In Indiana, they're 26% overvalued. In Georgia, they're 26% overvalued. In Florida, they're 20% overvalued. In California, they're 15% overvalued. In Nevada, they're 23% overvalued. But what's really interesting is that this overvaluation rate has big variation by zip code. So there are certain zip codes, if we zoom in on a place like Las Vegas, where prices are 62% overvalued. If you're thinking of buying in an area that's 62% overvalued, you should probably rethink that proposition. Or you should, when you make offers, offer well below market and well below ask. If prices are 62% overvalued, I just want to show you this, folks. It's saying that there's huge, huge downside. So if you see this overvaluation level in your market, there's huge, huge downside. And ultimately, it means that the home price-to-income ratio in the zip code is way above its long-term average. So here, the typical home price is $343,000. The median income is $40,000. How is that possible? That's not sustainable. You can see at the bottom of the last crash, the home price-to-income ratio went down to 1.9. So this overvaluation metric also shows you when it's a good time to buy. In a market like Florida, it was a great time to buy a house from 2009 all the way to 2019. If ReVenture App had existed back then, we would have been saying Florida's housing market is undervalued. You should buy. Now we're saying, hey, prices are 19% overvalued. Be careful. And they're going down over the next year according to our home price forecast score. But again, what's amazing is the variation by zip code. There's certain areas that are just crazy, crazy overvalued. In a state like Florida, like 53% overvalued. There's other areas that are actually undervalued. Downtown St. Petersburg. ReVenture App ranks as 4% undervalued right now. And that's due to the fact that income growth has kept up with home price growth. So if you are a buyer and investor who wants to better understand how much prices could drop in your area, and if it's a good time to buy, go to www.reventure.app right now and sign up for a premium plan so you can access that overvaluation rate and see our price forecast for your area. The cost of the monthly plan is $39 a month. Or if you want to save a little bit of money on the monthly cost, you can do the annual plan at $399 a year, which gives you a 15% discount on the monthly rate.